Why can't Treasury just buy up all falling stocks in the DOW? I am sure that will create a huge rally worldwide and I will more than happy to grow rich by their purchases.
That kind of action was exactly what the ex-financial secretary of Hong Kong did in 1998. They simply injected public funds to buy up the blue chips in the Hang Seng Index and that they claimed stopped the attacks on the Hong Kong dollar.
What happened in reality was many people became poorer as a result of the rescue made in Hong Kong in 1998. Many investors in the stock market were deprived of the chance to buy low because the local government in Hong Kong jumped the queue and bought the stocks in advance. No one dared to move in after the rescue because the prices in the stock market were really artificial and the situation got worse and worse.
But Hong Kong was lucky. The Tech-bubble soon arrived at Hong Kong and helped the stock market to rally in 1999. Well, everyone suddenly turned to IT, technology, digitization, the Internet, the cyber world, etc. Dot-com bubbles grew so big that capitals were multiplied by a million times.
I hope the US Treasury would follow the same steps and I am sure you will see a big rally and a bigger bubble waiting.
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